More markets are seeing home price declines, but the severity of the declines appears to be moderating, according to a quarterly forecast of mortgage risk compiled by First American CoreLogic.

A "moderating trend" in price declines over the last two quarters "indicates that the house price rate of decline is slowing down, a first step toward the bottoming out of price declines," First American CoreLogic’s third quarter CoreMortgageRisk Monitor concludes.

More markets are seeing home-price declines, but the severity of the declines appears to be moderating, according to a quarterly forecast of mortgage risk compiled by First American CoreLogic.

A "moderating trend" in price declines over the last two quarters "indicates that the house-price rate of decline is slowing down, a first step toward the bottoming out of price declines," First American CoreLogic’s third-quarter CoreMortgageRisk Monitor concludes.

The increasing stock of real estate-owned properties, the economy and inflationary risks could still spell trouble, "but for now we view the trend data as a glimmer of hope for the market."

Home prices in 380 markets tracked by the forecast fell by an average of nearly 11 percent from a year ago. Nearly 200 markets saw price declines, up from 176 in the second quarter and 143 in the first quarter.

While more markets are seeing price declines, the most severe declines remain concentrated in states that saw the most speculation during the boom. The 40 worst markets, which have all seen prices fall at least 15 percent in the last year, are in California, Florida, Arizona and Nevada.

The survey’s Core Mortgage Risk Index, which forecasts delinquency risk, was up 12 percent from a year ago and 55 percent above a baseline established in 2002 at the end of the dot-com bust.

"Although significantly higher now than during this base period, the CMRI is likely to continue rising nationally over the next 18 months," the forecast predicted.

While fraud and collateral risk had been the major factors driving up the risk of delinquency beginning in late 2005, by late 2007 "the rapid decline in home prices began to quickly overwhelm all other factors driving risk," First American CoreLogic said.

Eight of the 10 markets identified as having the highest risk of delinquencies were in California. Outside of California and Florida, the riskiest markets in the rest of the country included Las Vegas, Phoenix, and Washington, D.C.

Markets seeing home-price appreciation were concentrated in five states: Texas, Pennsylvania, Indiana, Alabama and Iowa. Each of those states had at least six markets where prices increased more than 2 percent during the last year, First American CoreLogic said.

 

***

What’s your opinion? Leave your comments below or send a letter to the editor.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×